By Royce Millar & Ben Schneiders

April 18, 2018 — 5.42pm

The last of a long list of government-backed "clean coal" projects has fallen over, with the Andrews government reluctantly confirming the end of a $90 million program announced amid much fanfare six years ago.

After days of pressing by The Age, Treasurer Tim Pallas’ department issued a statement announcing the conclusion of the joint federal and state Advanced Lignite Demonstration Program (ALDP) after the collapse of the program’s remaining scheme – a plan to turn Gippsland coal into char and oil by a company called Coal Energy Australia.

Latrobe Valley brown coal.Credit:Andrew De La Rue

Mr Pallas refused to answer questions, instead leaving his department to handle media requests. Two other projects supported under the program had already failed.

The latest failed project did not receive any of the $90 million in government funding as it did not succeed in turning brown coal into clean fuel. It is not clear how much of that money has gone to any project.

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The confirmation of the failure of the advanced lignite program comes just days after both the Turnbull and Andrews governments promised to sink another $100 million into another experimental scheme for the Latrobe Valley, this time a $500 million, Japanese-backed plan to extract hydrogen from brown coal.

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The new coal-to-hydrogen scheme is the latest grand plan seeking alternative uses for the brown coal which has powered the Victorian economy for decades but is much maligned in an era when slashing emissions is government policy.

State and federal governments, both Labor and Coalition, have repeatedly backed projects in the hope they might revive the Latrobe Valley.

Not one of the slew of supported projects has succeeded.

The Advanced Lignite Demonstration program was established in August 2012 to develop "pre-commercial brown coal upgrading technologies to provide low emission energy products from Victoria's coal reserves’’.

Government payments were not made to the Coal Energy Australia project, which failed to pass milestones necessary for up to $30 million in public funding.

Coal Energy Australia had also signed a sales contract for a site that includes the now defunct Morwell Power Station and briquette factory.

Prime Minister Malcolm Turnbull annouced a joint project with Japan to develop and export Hydrogen fuel made from brown coal in the Latrobe Valley. Credit:Justin McManus

In its most recent filed financial accounts, Coal Energy Australia’s auditors warned of "significant doubt" the coal company could continue as a "going concern" due to its weak financial position.

It had lost $8.1 million in 2015/16 with its liabilities well in excess of its assets. One of its bank accounts had a balance of $5.

Since 2015, two other projects connected to the ALDP have collapsed, including a project to turn brown coal into synthetic crude oil and higher grade steel-making coal and another project to convert coal to briquettes.

Environment Victoria has long argued against continued government investment in "clean coal".

The Morwell power plant soon after it was built. Credit:State Electricity Commission of Victoria

"The failure of the Advanced Lignite Demonstration Program to produce even one viable brown coal project should be a signal that it is time to move beyond this polluting and outdated resource," said campaign director, Nicholas Aberle.

"This project not going ahead will save Victoria 2.2 million tonnes of climate pollution and free up $30 million of public funding to spend on projects that are actually capable of creating sustainable jobs in the Latrobe Valley."

While investing $50 million in the latest, Japanese-backed hydrogen scheme, the Andrews government has been only lukewarm in its public support.

On Wednesday Mr Pallas left it to the governernment's earth resources director John Krbaleski to explain: “The Victorian Government continues to support innovation in developing brown coal projects with low carbon emissions as demonstrated by the hydrogen production trial announced last week.”

“The department will work with businesses to support low emission coal projects that can deliver jobs and economic development in the Latrobe Valley.”

Ben Schneiders is an investigative journalist at The Age and has reported extensively on wage theft, corruption, business, politics and the labour movement. A three-time Walkley Award winner, he has been part of The Age’s investigative unit since 2015.